In the 25 years since Hurricane Andrew struck South Florida, insurance industry analysts believe much has been learned from that destructive storm and insurers have a far better grip on their catastrophe exposures, but they warn that if a similar storm happened today, the outcome would be even more devastating.

Hurricane Andrew made landfall a few miles south of Miami on Aug. 24, 1992, and tore through the city of Homestead, destroying more than 63,500 houses, damaging more than 101,000 others, and killing 65 people.

The Category 5 hurricane caused $26.5 billion in economic damage, of which $15.5 billion was insured. Hitting insurers and reinsurers hard, one of the long-term effects of the storm was the development of the nascent catastrophe modeling industry.

“What we learned at the time is that the approach that companies were using to estimate their catastrophic loss potential was not sufficient,” said Karen Clark, co-founder of Karen Clark & Co. in Boston and a catastrophe modeling pioneer. “Cat modeling was around but most people didn’t believe the numbers. Before Andrew, people thought the worst case scenario was about $7 billion and the first hurricane model was saying that could be up to $60 billion, so even though there were companies using the models, they really didn’t believe the numbers.”

Ms. Clark added that “the thing that was missing before Andrew is that insurers had stopped tracking their exposure growth, how much property value they were insuring in different areas particularly coastal areas. All that changed with Andrew and now all companies run the cat models and they put their exposures in.”

And the information going into the models has developed significantly over the past 25 years.

“Right after Andrew, companies were only able to provide county level exposures, then a few years after that, they were able to provide 5-digit zip code level exposure data. And now most companies can provide — at least in the U.S. — geocoded data.”

Lynne McChristian, Florida representative and catastrophe response director for the Insurance Information Institute in Tampa, said the models have improved since Hurricane Andrew.

“Andrew showed that the industry was seriously underestimating how damaging a storm can be,” she said. “What we learned is that the storms were worse than we imagined; nobody knew they could be that severe. The science and modeling has improved and it’s helped insurers understand more about the risks they have on their books.”

AIR Worldwide estimated that if Hurricane Andrew were to occur today it would cause $56.3 billion in total industry insured losses, based on today’s exposures, in the United States.

If a similar, Category 5 hurricane were to strike just south of Miami and just eight miles north of Andrew’s landfall, AIR said that total insured losses would exceed $138 billion.

“We have been making great strides to improve the models,” said Peter Sousounis, assistant vice president and director of meteorology at AIR Worldwide in Boston.

Earlier this month, Swiss Re Ltd. released a report, “Hurricane Andrew: The 20 Miles That Saved Miami,” which modelled the outcome of the same storm in 2017 and found that economic losses would be estimated at $80 billion to $100 billion in current dollars, with $50 billion to $60 billion covered by insurance. Miami-Dade County has seen a population boom of more than 35% since 1992.

“We are going on our 12th hurricane season without a major hurricane striking the United States,” said Megan Linkin, meteorologist, weather risk and natural hazards expert for Swiss Re in Armonk, N.Y., and co-author of the report. “A lot of people are moving down there (Florida) and that means there’s also a lot of people that haven’t experienced a hurricane.”

Ms. McChristian of III said that one of the big takeaways from Hurricane Andrew “is that building codes matter.”

“And it’s not just about having them in place,” she said. “It’s making sure they’re enforced. The codes on the books sounded good but they weren’t being enforced with rigor.”